BASE METAL OUTLOOK
Copper prices could weaken further on the back of weak sentiments. We had expected copper prices to correct and come down to around $7,500 levels. However, the red metal has breached that level and is now trading lower. In the coming week, we expect copper prices to find support at $7,000 and face resistance at $7,580 level.
Aluminum prices could weaken further if crude oil prices decline in this week. Prices are expected to hover around $2,800 levels. We had expected Nickel prices to decline and find support at $17,500 levels. In the coming week too we expect Nickel to trade between $17,500 to $18,000.
On the macroeconomic front, currency movement will play a crucial role in price determination. The strengthening of the US Dollar could weaken base metals further. Since the Euro is affected on concerns over slowdown in the Eurozone, the US Dollar could strengthen further. Weakness in base metals in the last week could be followed by a bout of short-covering in this week.
However, with overall weak sentiments doing rounds any rally in base metals is not sustainable. Hence, we expect trade in base metals to remain choppy today.
Copper
Copper prices witnessed a sharp fall last week with LME prices currently trading around $7300 level. Prices on LME shall find strong support at $7150 & resistance at $7580.
MCX Aug contract shall find immediate support at Rs.305 level. Further below, support is seen at 300 levels. Whereas resistance is seen at Rs.312 levels & further upwards at 315.40.
Zinc
Zinc prices are currently witnessing a down-trend with prices likely to find strong support at $1580-1600 levels on LME. Immediate support is seen at 70.20 levels for MCX Aug contract whereas crucial support is seen 68.50 levels. Short-term resistance is seen at 72.7 whereas major resistance is seen at 74.20.
Zinc prices are currently trading around 93 levels. Immediate support is seen at Rs 92.30 levels for MCX Feb contract whereas crucial support is seen 90.60 levels.Short-term resistance is seen at Rs95.40 whereas major resistance is seen at Rs97.
Source: www.commodityonline.com